STC Subsidies Increase to $11.5 Million in 2012

STC’s 2012 Annual Report is out, and the numbers are disappointing. The bus service’s annual operating subsidy increased from $8.7 in 2011 to $9.2 million as ridership declined by 2 percent. The 2012 capital grant was $2.3 million compared to $2 million in 2011.

While the STC is eliminating three routes that have averaged between one and two riders per trip, which should save $300,000 annually, much deeper reforms are needed. That doesn’t necessarily mean less service. But it does mean re-thinking the monopoly service delivery model.

As I argued in Inter-City Busing: A New Regulatory Framework for Canada, states such as Washington, Colorado, Oregon, and Maryland have been able to reduce the cost of rural bus service through competitive tendering. Washington State is perhaps the only jurisdiction in North America where rural service has actually increased over the last several years. Their system of competitive tendering has been so effective that they’ve been able to introduce new routes without increased subsidies, and still bank money each year to put towards future expansions. Their rural intercity bus subsidy program cost $4.3 million between 2007-2012, which is less than half of what STC requires for a single calendar year. It’s hard to argue with those results.